FY2008 was a year of unprecedentedly severe challenges for Mazda. The financial crisis that swept the world during the period under review quickly fed through to the real economy. From the second half of 2008, economies geared sharply down both in Japan and around the world, as global demand in the auto sector quickly declined, combined with a steep rise in the value of the yen.

To respond to these punishing conditions, Mazda undertook urgent measures in each of the fields of production, sales and development. We adjusted production levels to streamline inventory, while reviewing our cost structure with a view to trimming all expenses. Global unit sales in FY2008 contracted 8% from the previous fiscal year, to 1,261,000 units, owing to the dramatic deterioration in sales conditions worldwide. Even so, Mazda succeeded in maintaining and in some cases increasing its market share in key markets including North America and Europe. Consolidated net sales declined to \2,535.9 billion. A consolidated operating loss of \28.4 billion was recorded, along with a consolidated net loss of \71.5 billion.

After consideration of the above business results, and of the precipitous deterioration in the business environment in recent times, the directors of Mazda decided to forego distribution of a year-end dividend for FY2008 (the interim dividend of \3 was distributed as usual).

This unforgiving environment is expected to continue unabated in the near term. Mazda is determined to accelerate its moves to pare costs to construct a lean, muscular management structure. We are restructuring across all fields of operation, including production, sales, development and cost management, in order to bolster brand value and enhance operational efficiency.